Description: Representation of an operating oil and gas exploration debtor company in reorganizing its secured, unsecured and governmental obligations associated with the operation of onshore and offshore oil and gas properties. Included in the representation was an analysis of hedged positions for the sale of physical oil and gas production in a rising market, the restructuring of significant second lien secured bond indebtedness held under trust indenture, and the negotiation and resolution of substantial onshore and offshore plugging and abandonment and environmental obligations owed to state and federal authorities. Included in the proceeding was litigation over payment of royalty claims, litigation concerning the design and resolution of decommissioning obligations for offshore platforms and wells, and litigation with co-owners and other parties in interest over continuation of oil and gas leases and farm out agreements. Reported decision in the case addressing satisfaction of offshore well obligations: In re Tri-Union Dev. Corp., 314 B.R. 611 (Bankr. S.D. Tex. 2004) andIn re Tri-Union Dev. Corp., 349 B.R. 145 (Bankr. S.D. Tex. 2006)

Description: Represents the administrative agent in connection with the restructuring of the term loans provided to a global multi-product conglomerate company, including the collateralization thereof and the coordination with the other creditor constituencies in the Chapter 11 bankruptcy case.

Tri-Union Development Corporation – Chapter 11
Representation of an operating oil and gas exploration debtor company in reorganizing its secured, unsecured and governmental obligations associated with the operation of onshore and offshore oil and gas properties. Included in the representation was an analysis of hedged positions for the sale of physical oil and gas production in a rising market, the restructuring of significant second lien secured bond indebtedness held under trust indenture, and the negotiation and resolution of substantial onshore and offshore plugging and abandonment and environmental obligations owed to state and federal authorities. Included in the proceeding was litigation over payment of royalty claims, litigation concerning the design and resolution of decommissioning obligations for offshore platforms and wells, and litigation with co-owners and other parties in interest over continuation of oil and gas leases and farm out agreements. Reported decision in the case addressing satisfaction of offshore well obligations:In re Tri-Union Dev. Corp., 314 B.R. 611 (Bankr. S.D. Tex. 2004) and In re Tri-Union Dev. Corp., 349 B.R. 145 (Bankr. S.D. Tex. 2006)

This paper addresses issues that may arise in connection with the insolvency of corporations and certain other business organizations in the United States of America. Attorneys and businessmen who are not United States citizens may be aware that the United States has a “dual” system of government: the federal government has jurisdiction throughout the entire country and each state government’s jurisdiction, of course, extends only to the boundaries of each specific state.

Bankruptcy in the United States is a matter of federal law. Corporate governance matters, however, generally are controlled by state law. Although federal laws preempt conflicting state laws, in most cases federal and state laws are interpreted and applied to eliminate conflicts so that no preemption occurs.

Bankruptcy is an excellent example of federal and state coordination. The federal bankruptcy statute governs the bankruptcy process with respect to debtors and creditors in the federal bankruptcy courts. The applicable state corporation statute governs the bankrupt corporation’s internal corporate affairs. The discussion that follows reviews certain basic principles of corporate governance, including the duties owed by directors and officers to the creditors of financially troubled and bankrupt corporations, with particular attention on transactions involving a change of corporate control. This outline generally does not differentiate between the duties and liabilities of officers and directors, but rather considers them as a group for purposes of corporate governance issues. Delaware corporation law is used as the primary state law reference.

The following discussion also addresses issues that may arise connection with the insolvency of limited liability companies and limited liability partnerships. Limited liability entities are relatively new forms of business organizations that have been created in recent years by state legislatures. Finally, the discussion that follows addresses certain ethical issues that may be faced by attorneys advising insolvent and bankrupt corporations.

This article is a compilation of “selected” cases primarily from the period January 1, 1997 through approximately January 1, 2001 and focuses primarily on decisions rendered pursuant to the statutory provisions contained in Chapter 11 of Title 11, United States Code, codified as 11 U.S.C. § 1101et seq., and the administrative powers set forth in Chapter 3 of Title 11, United States Code, codified as 11 U.S.C. §§ 361-366.